Former Mountain State University students to begin receiving disbursements Aug. 29

Aug. 26--Former Mountain State University students will begin receiving settlement disbursements Aug. 29, according to Beckley attorney Stephen New.

After attorney's fees and other costs, students will divvy up $11.2 million -- $8.4 million to nursing students and $2.8 million to non-nursing students.

Approximately $5.7 million in attorney's fees will be divided among 22 law firms.

New said about 450 nursing students claimed 58,000 credit hours and between 3,000 and 5,000 non-nursing students claimed over 34,000 credit hours.

One nursing credit hour equates to $145.67 and one non-nursing credit hour equates to $81.14, New added.

"(My clients) are relieved to have the process over, but for all of us who've been through this process, these are insufficient assets for the amount of harm that was done to these students by the leaders of Mountain State University."

New said another $2 million to $3 million may be recovered from the U.S. Department of Education through student loan refunds, but even with the total $20 million settlement, students are only receiving about one-third of the money they lost, approximately 30 cents on the dollar.

The lawsuit MSU has filed against the Higher Learning Commission, New said, will have no impact on students.

The lawsuit, filed May 20, 2014, claims the HLC's decision to withdraw MSU's accreditation in 2012 was "arbitrary and capricious, unreasonable, an abuse of discretion and not based on substantial evidence." The loss of accreditation led to MSU's closure in early 2013.

In thousands of complaints filed by students, they said they were unable to transfer MSU credits to other institutions, and job prospects were slim with a degree from an unaccredited school.

"It's unfortunate that Mountain State did much more damage than they had insurance to cover or that could be recovered through lawsuit process. The damages were upwards of $60 to $80 million."

New said this December marks five years since the first nursing student walked into his office and shared their story about the now-defunct university defrauding them.

He said a lot of work went into this extremely complicated lawsuit, but he is glad students can now move forward.

The other portion of the settlement, 15 percent, will go to the University of Charleston for the teach-out program agreed upon by the HLC, and for the loss of assets the university was set to acquire after MSU resolved its liabilities.

The Beckley campus has since been sold to West Virginia University. Officials expect a freshman class to arrive at WVU-Beckley in Fall 2016.

-- E-mail: [email protected] and follow on Twitter @WendyHoldren

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